Australia Trading Rules, Brazilian Oil, PwC: Compliance

The Australian Securities and
Investments Commission is proposing new rules to regulate
automated stock trading that will require traders to have
stringent controls on their platforms.

Electronic trading platforms have come under scrutiny this
month after a trading error at Knight Capital Group Inc. (KCG) drove
the market maker to the verge of bankruptcy, according to a
statement by Belinda Gibson, deputy chairman of ASIC.

Traditional exchanges worldwide are losing market share to
alternative operators. Trades on dark pools, where the size of
orders and identity of the parties are hidden, are reported to
exchanges after they have taken place. ASX Ltd. (ASX) lost its
monopoly as Australia’s only public, or lit, bourse in October
last year with the entry of Nomura Holdings Inc.’s Chi-X
Australia Pty.

Block trades and dark pools, off-exchange venues that don’t
display prices, accounted for an average 25 percent of
Australian share transactions this year and as much as 43
percent on one day in June, ASX, operator of the country’s
largest bourse, said on Aug. 6.

“Automated trading is the evolution of broking and trading
practices using computer technology,” the Australian Financial
Markets Association, an industry group representing leading
brokers, banks and fund managers, said in a statement. “In
order for Australia’s markets to maintain relevance and
compatibility with international markets, it is essential that
the local markets keep pace with the latest developments. It is
important that risks that accompany it are managed prudently.”

For more on ASIC, see Compliance Action, below.

Compliance Policy

Brazil Oil Regulator Studies 17 Local Content Waiver Requests

Brazil’s oil regulator is studying requests from about five
oil operators to reduce local content requirements at 17
contracts in the country, Marcelo Mafra, the head of local
content rules at the agency, said in an interview in Rio de
Janeiro yesterday.

Companies are able to obtain waivers from local content
rules if they can prove they can’t find the goods and services
locally or if prices are out of line with international
standards, he said. Mafra declined to name the companies seeking
the waivers.

Spain to Change Law on Preferred Shares, Confidencial Says

Spain will change rules governing the sale by banks of
preferred shares on Aug. 24, El Confidencial reported, without
saying where it got the information.

New issues will have to have an institutional tranche of
about 40 percent. At least 20 institutional clients will have to
subscribe.

Minimum investment will be set at 100,000 euros ($123,300),
the online newspaper said.

Libor Failures Neuter BBA as Lobby May Lose Oversight of Rate

Regulators and lawmakers in the U.K. are weighing whether
to strip the British Bankers’ Association of its role overseeing
the setting of Libor, the world’s most important benchmark
interest rate, in the wake of the Libor-rigging scandal.

U.S. Treasury Secretary Timothy Geithner and the Bank of
England have both faulted the lobbying group for failing to fix
Libor in 2008 when the Bank for International Settlements first
raised concern that the benchmark was being manipulated.

Libor is the latest of a series of scandals to hit Europe’s
biggest financial center this year: regulators have forced banks
to compensate customers improperly sold insurance on loans, and
are probing the mis-selling of derivatives to consumers. HSBC
Holdings Plc (HSBA) and Standard Chartered Plc (STAN), two of the country’s
five biggest lenders, are being accused by U.S. regulators of
flouting anti-money laundering regulations.

The BBA represents more than 200 banks and lobbies policy
makers and regulators on behalf of the industry.

For more, click here.

Australian Regulator Will Oversee Crowdfunding as SEC Mulls Move

Australia’s main securities regulator will oversee
entrepreneurs looking to raise money from so-called crowdfunding
websites like Kickstarter and Indiegogo, and require some to
publish financial documents.

Projects offering financial rewards to investors would be
regulated in a similar way to companies issuing shares, the
Australian Securities and Investments Commission said in a
statement on its website today. Failure to comply can result in
fines of as much as A$22,000 ($23,000) and five years
imprisonment if the agency concludes the fundraiser was
operating a managed investment, ASIC said. Only crowdfunding
sites based in Australia will be affected by the rules.

Individuals contributed about $123 million through
crowdfunding globally last year, a 284 percent increase from
2010, according to Daily Crowdsource, a San Diego-based provider
of industry news and research. The mechanism allows startup
companies to use social-networking platforms such as Facebook
Inc. and Twitter Inc. to raise capital.

The market for crowdfunding has opened up in the U.S. after
the April 5 passage of a law that will allow entrepreneurs to
sell as much as $1 million in securities through social
networking sites. Startups in Australia would be required to
publish a product-disclosure statement, similar to that provided
for issues of new shares on the Australian Securities Exchange,
if they were considered to be offering financial rewards, ASIC
said.

Australian-based websites that offer a venue for
crowdfunding online without disclosure statements will also face
fines of as much as A$11,000 and as many as two years’
imprisonment, ASIC said.

Compliance Action

PwC Investigated by U.K. Accounting Board Over RSM Tenon Audits

PwC, along with “certain members of the Institute of
Chartered Accountants in England and Wales,” is being
investigated for audits carried out for RSM Tenon, a corporate
finance advisory firm, for the years ending in June 2010 and
2011, the London-based accounting regulator said in an e-mailed
statement.

The investigation will cover “the preparation, approval
and review of financial information in connection with the
admission of RSM Tenon Group Plc to the main market of the
London Stock Exchange and the acquisition of RSM Bentley
Jennison,” the AADB said.

RSM Tenon said it found “significant errors” in its 2010
earnings in a statement earlier this year and reduced its pretax
profit by 12.1 million pounds ($19 million). The AADB fined PwC
a record 1.4 million pounds in January for failures concerning
reports on client-money accounts at JPMorgan Chase & Co. (JPM)’s
London securities unit.

“We will be cooperating fully with the AADB
investigation,” PwC said in an e-mailed statement. “We will be
vigorously defending our audits and other work carried out for
the RSM Tenon Group.”

Separately, a proposal by the U.K.’s Financial Reporting
Council to increase fines levied on accounting firms for
misconduct is under attack from a group of accounting firms
known as the Big Four, the London-based Times reported.

Deloitte, Ernst & Young, KPMG and PwC face paying tens of
millions of pounds in fines for mistakes in supervising
companies’ accounts. The size of fines is to be fixed in
accordance with the auditors’ revenues under the proposal, the
newspaper reported. The proposal is unfair, disproportionate and
potentially damaging, the Big Four said, according to the Times.

Sacombank Securities Being Probed for Stock Manipulation

Hanoi city police are probing claims Sacombank Securities
intentionally published incorrect information or concealed the
truth regarding stock-trading activities, the company said in a
filing posted on the Ho Chi Minh City Stock Exchange’s website
on Aug. 10. Ho Truc Lam, a Sacombank Securities spokeswoman,
declined to comment by phone yesterday.

Sacombank Securities allegedly “manipulated its stock
prices in multiple instances,” Bach Thanh Dinh, Hanoi’s deputy
police chief, said by phone yesterday. He declined to give more
information while the investigation was proceeding.

The company, the Ho Chi Minh City exchange’s third-largest
brokerage at the end of 2011, was placed under scrutiny on July
23 and trading of its stock was limited to the last 15 minutes
of daily trading, the bourse said in a statement on its website
July 19. The move came after the company posted a 1.4 trillion
dong ($67 million) loss that exceeded its equity as of March 31,
according to the bourse’s statement.

“We will work with the police to get more information on
the investigation and take suitable action,” Vu Bang, chairman
of the State Securities Commission, said by phone yesterday. The
commission regulates the country’s stock market.

The Ho Chi Minh City bourse won’t take more action until it
discusses the investigation with the SSC and Hanoi police,
according to Le Hai Tra, the exchange’s deputy chief executive
officer.

SEC Demands $16 Million in Fraud Case of Former Soyo CFO

Nancy Shao Wen Chu, former chief financial officer of Soyo
Group Inc. (SOYO), was ordered to pay $15.6 million to resolve
securities fraud charges, according to the U.S. Securities and
Exchange Commission.

Chu was accused by the SEC of inflating reported revenue at
Soyo, a now-defunct Ontario, California-based electronics
distributor, by booking more than $47 million in fictitious
sales in 2007 and 2008. Statements in the filings misled
investors, bankers and auditors, the agency said yesterday in a
statement. Eric Jon Strasser, a consultant the agency said was
involved in two fraudulent Soyo SEC filings, was ordered to pay
$260,000.

Soyo filed for Chapter 7 bankruptcy in 2009.

The SEC said neither Chu nor Strasser responded to the
initial complaint. Telephone listings under Chu’s name in
Ontario and for an Eric J. Strasser in Chino Hills, California,
were no longer in service.

ASIC Lists Investigation Targets, Sees Increase, AFR Says

The corporate regulator conducted preliminary inquiries
into 114 suspect share trades between January and June 2012, the
Review said. Thirty-six of the cases are now being investigated
by ASIC’s enforcement team, compared with 23 such cases during
the previous six months, according to the Review.

Siemens Faces Probe Into Possible Extortion, FT Deutschland Says

Siemens AG (SIE) may face a criminal probe of allegations that
management board member Brigitte Ederer extorted the mayor of
the French city of Lille in an attempt to win an order,
Financial Times Deutschland reported.

Lille prosecutors are reviewing the issue to decide whether
to open an inquiry, the newspaper reported, citing the
investigators. Mayor Martine Aubry told the municipal parliament
in June that Ederer had sent an e-mail threatening cuts at
Siemens’s French unit should the company fail to win an order
valued at 266 million euros ($327 million) for a driverless
subway system in the city, according to FTD.

Siemens lost the contract to Alstom SA (ALO), a French
competitor, according to FT Deutschland. Ederer, who is head of
human resources at Siemens, has been questioned by the
authorities, the newspaper said.

Siemens doesn’t comment on pending proceedings, company
spokesman Alexander Becker said. Siemens, based in Munich, is
Europe’s largest engineering company.

Interviews

Standard Chartered Wants to Save Face After Lying, Barofsky Says

Neil Barofsky, a former federal prosecutor who oversaw the
Troubled Asset Relief Program, said regulators had uncovered a
pattern of dishonesty at Standard Chartered Plc, the bank
accused of breaching money-laundering rules.

There was “a pattern of lying and deceiving the state
regulator,” Barofsky, who resigned as special inspector general
of TARP in 2011, said in an interview on “Bloomberg
Surveillance” with Tom Keene. The bank’s defiant response was
to protect its image, he said.

“It’s a PR move,” said Barofsky, now an adjunct professor
at the New York University School of Law. “They are going all
out to do something to protect their reputation.”

Benjamin Lawsky, New York’s banking superintendent, this
month alleged that London-based Standard Chartered flouted U.S.
banking laws by helping launder about $250 billion in Iranian
funds. The bank’s chief executive officer, Peter Sands, said he
rejected Lawsky’s version of events.

The company was allowed to buy the whole of Credit Agricole
Yatirim Bankasi Turk AS from its Montrouge, France-based parent,
the Ankara-based regulator said on its website yesterday. It
didn’t disclose the value of the transaction.

For more, click here.

Comings and Goings

Clegg Said to Have Role in Picking King Successor as BOE Chief

Deputy Prime Minister Nick Clegg will have a say in the
appointment of the next Bank of England governor, boosting the
chances of candidates who take a tough line on banks such as
Financial Services Authority Chairman Adair Turner and the
former civil-service chief, Gus O’Donnell.

The involvement of the Liberal Democrat leader stems from
the 2010 coalition agreement with Prime Minister David Cameron’s
Conservatives, according to two officials with knowledge of the
process. A Liberal Democrat official who asked not to be
identified because the discussions have yet to begin said the
party sees the appointment as the most significant of any that
the government will make.

The decision on who should replace Mervyn King, who is due
to retire from his position as Governor in June 2013, is
complicated by the fact that Britain has a coalition government
for the first time since 1945.

King, 64, is retiring after completing the maximum tenure
of two five-year terms.